Kyria did a great rundown of her yearly spending and it inspired me to look at our yearly totals.
Every year we set a budget per catagory, based on the previous year. The total budget is less than our take home, and we don't track our incomings because as long as we spend roughly according to budget we know e will be fine.
Every friday I look through our credit card statement and add every item to an excel spreadsheet. I kow there are easier and quicker ways to do this, but I realized I get a sort of "second pleasure" from tracking in this way. I get to enjoy my coffee, then I get to remember enjoying that coffee on Friday when I £3.50 to the spreadsheet.
We record our spending in a number of categories, but I had never thought to expand this out for a whole year. It was interesting figuring out what we spend in an entire year - it's a big number! Also, we don't include nursery fees or retirement savings here... for no real reason. We probably should. However, here is the breakdown of our spending in 2023:
Bills includes our mortgage (but not nursery fees?) so that is the single largest category. I might think of including "Nursery" in Bills and moving Mortgage into house this year. I have set up an automatic additional payment for the mortgage, and both the standard payment and the additional payment amount to 60% of the bills figure.
Grocery we received a lot of groceries as gifts this year so this number is lower than it should be. We eat a lot of food, we cook most of our meals at home. We feed a lot of people and like having guests over. This category does not include alcohol, which usually has its own small budget but didn’t this year since I wasn’t drinking.
Kids - This category is somewhat hard to define since it includes things we have to buy for the kids (school uniform), and activities we do with the kids (gymnastics) but not always clothes for the kids. Or what about when we go swimming as a family? I wouldn't go swimming without the kids, so does this fall into kid budget? This category was higher this year after having to buy some pieces for the twins. Also, I put my pregnancy physio under hobbies, but maybe that should be a kid expense? The system is not perfect
Hobbies - Andy and I both have a hobby budget. Mine usually goes to gym classes, haircuts, and massages etc. Andy spends money on bikes and beer and clocks (he is a hobbiest clock person now). He gets slightly more than me because his hobbies are more expensive than mine.
House - this is for all home projects. It's a hard budget for me to set as we need to think through any work we want done in the year. This year we had a shed built on the back of the garage, and we had a fence put up around the driveway. We also bought some
larger furniture for the house, and of course did our
mini kitchen renovation.
Transport - We saved some money here when Andy stopped commuting to Bristol and when I started maternity leave. Previously we were spending £60 a week on trains. This covers trains, petrol, and repairs to commuting bikes.
Clothes - We should probably spend a bit more here. A lot of what we wear has holes. This should cover kid clothes too, although we have been super lucky to mostly get hand-me-downs for Lilah recently. And we wait for Grandma to visit to buy Isaac clothes. That's what grandmas do right?
Dining Out - this is for meals out with more than 1 member of our family. If I go out with friends that's a Rachel Hobby, but if I go out with Andy (or Isaac or Lilah) it's a dining out budget. Andy and I went to some nice meals together last year. We probably won't be doing out much this year, but even a trip to a cafe with all the kids adds up! Also, I wonder if I go for a coffee with twins in tow whether that counts as Dining Out or Rachel Hobbies...?
Gifts - until last year this was part of the "misc" budget, but I decided to seperate it out this year to see what we actually spend in a year. We don't buy much for the kids, so lots of this is for friends and family - sending flowers or thank you gifts to people. I didn't use to do much gift spending but as we've earned more I've decided it's nice to send people thank you treats when they've done something very helpful/kind.
Misc - everything else. Why is this category so high still? It's weird to me that 3% of our spending is non quantifiable.
Do you keep a yearly budget? What categories do you keep?
I really like your frank discussion about categories— this is where budgeting gets super tricky for me— all the overlap.
ReplyDeleteI only started taking a look at what I was spending this year because I'm flirting with not working. It's not budgeting, it's just being aware of how much I spend and where it goes. Overall I'm fairly happy - I spend a number that I will not name on food because we're feeding two teenagers but everything else seems in line.
ReplyDeleteI handle restaurant spending exactly like you do - if it's with Hubs, family, or friends then it's "dining out" but if it's something I get on my own it's usually because I'm traveling to so I class it to travel.
I think I used the term "Budget" to mean a few things in this post, so I've tried to go back and tweak it. We do set budgeted amounts but then we spend what we spend... As long as we are close to the budget we don't have to worry about money. I track more to keep an eye on where money is going than to set specific savings goals. This year we upped the house budget massively half way through the year and still spent more - but I'm happy with everything we spent it on.
DeleteI'm wondering at what point our food budget will be higher than our mortgage budget. Teenagers are no joke!
Figuring out which category to put things in definitely is the hard part. I have adjusted mine a few times! When I first started, I called any restaurant meals "dining out" but then I realized most of my dining was while traveling so I moved those into "travel" instead, but still sometimes you just have to decide on one and go with it. For example, if I drive to Tahoe to go running with a friend, is that "dining out?" or should it be "entertainment" or "travel?" It's not always clear.
ReplyDeleteRe your coffee with babies, maybe it is a hobby until they are also eating with you, then it is dining out. ??
Oh yes - Travel used to be a budget, but then Andy and I started traveling seperately and so it got wrapped into our hobbies budgets. However we also have a holiday budget (not this year, since we weren't going away) and I never know whether a grocery shop while at an AirBnB while on holiday should be holiday budget or grocery budget? There's a lot of ambiguity in budgeting but I do find the breakdowns interesting even so.
DeleteAgreed that categorization is hard. I think I'm going to do one of these posts next week and it's hard to "compare" with others since everyone does things very individually. I think I've mostly come up with a system that works, but I've tweaked things over the years so it's impossible to fully compare changes year-over-year since I've moved things around to different categories over time.
ReplyDeleteI hadn't thought of comparing year on year but that would be interesting! But of course with the tweaking it doesn't really give accurate info, although I guess I could compare my grocery spending over the last 5 years...
DeleteHa ha. I don't even call mine budgeting. Just keeping track of how I spend my money. And our food costs are significantly more than what everyone else seems to be spending! We never eat out! We cook all our meal! I don't know how to get this area down.
ReplyDeleteI love these types of posts. It's so nice to see everyone being frank about how they spend money and what they prioritize!
I always love looking at these pie charts and seeing how other people organize their finances. We have some of the same categories but yeah, categorizing the expenses can get tricky sometimes.
ReplyDelete